BUILDING CERTIFIERS GUIDE TO QBCC INSURANCE & OWNER BUILDER REQUIREMENTS FOR RESIDENTIAL CONSTRUCTION

BUILDING CERTIFIERS GUIDE TO QBCC INSURANCE & OWNER BUILDER REQUIREMENTS FOR RESIDENTIAL CONSTRUCTION

QBCC s OFFICES Brisbane Head Office 299 Montague Road West End QLD 4101 Toowoomba Office Clestrain Mall, 131A Herries Street Toowoomba QLD 4350 Sunshine Coast Office 6 Pikki Street Maroochydore QLD 4558 Gold Coast Office Suite 26, Robina Super Centre 86 Robina Town Centre Drive Robina QLD 4226 Cairns Office 181 Aumuller Street Westcourt QLD 4870 Mackay Office Tenancy 2, 42 East Gordon Street Mackay QLD 4740 Rockhampton Office 194 Alma Street Rockhampton QLD 4700 Townsville Office Unit 2, 22 Hervey Range Road Townsville QLD 4817 Maryborough Office Suite 1, 208 Lennox Street Maryborough QLD 4650

INTRODUCTION This guide has been produced with the aim of assisting building certifiers to more easily understand the requirements of the Queensland Building and Construction Commission Act 1991 (the QBCC Act) in relation to development approval of residential construction work. BUILDING WORK REGULATED BY THE QBCC ACT Section 42(1) of the QBCC Act states that a person must not carry out or undertake to carry out building work unless that person holds a contractor s licence of the appropriate class. Part 2, Division 2, of the Queensland Building and Construction Commission Regulation 2003 (QBCC Regulation) Residential construction work 9 Definitions for div 2 In this division associated building work see section 12. primary building work see section 11. related roofed building means a building, other than a residence, that (a) has a roof that is designed to be (i) part of the structure of the building; and (ii) impervious to water or wind; and (b) is on the site of a residence or proposed residence, or proposed to be on the site of a residence or proposed residence; and (c) is used, or proposed to be used, for a purpose related to the use of the residence, or proposed residence. Example of related roofed building A private garage, shed, carport, toilet building or change room on, or proposed to be placed on, the site of an existing or proposed residence. residence means a building or part of a building fixed to land and designed to be used for residential purposes, whether or not it is part of commercial or industrial premises, but does not include the following (a) a boat, caravan, manufactured home, motor vehicle, tent, trailer, train or another similar thing; (b) a building designed as a temporary building, including, for example, a demountable building. 10 Classification as residential construction work For the Act, schedule 2, definition residential construction work, the following is classified as residential construction work (a) primary building work; (b) associated building work. 11 Meaning of primary building work (1) Subject to subsection (3), for section 10(a), building work mentioned in subsection (2) is primary building work if it is (a) carried out by a building contractor; and (b) for a residence or a related roofed building; and (c) of a value of more than $3 300. (2) For subsection (1), the following is the building work (a) construction of the residence or related roofed building; (b) building work that affects the structural performance of the residence or related roofed building; Updated December 2013 version 5 3

(c) (d) (e) (f) (g) building work for relocation or replacement of a roof, wall, internal partition, floor or foundation; building work for replacement or refitting of fixtures or fittings in a bathroom or kitchen in the residence or related roofed building; building work for an unenclosed, elevated platform or verandah, including a deck, attached to a residence; building work that increases the covered floor area of the residence or related roofed building; building work for installation or repair of the primary water supply to, or sewerage or drainage for, the residence or related roofed building. (3) The following is not primary building work, but may be associated building work (a) fencing; (b) landscaping; (c) painting; (d) installation, renovation, repair or replacement of any of the following (i) air-conditioning; (ii) driveways, or paths; (iii) units for heating water regardless of the source of energy for heating, and including units for heating swimming pools; (iv) refrigeration; (v) roller shades and shutter screens; (vi) security doors and grills; (vii) solar power units and associated electrical components; (viii) swimming pools, or spas that are not part of a bathroom; (ix) water tanks that are not part of a primary water supply for the residence or related roofed building. 12 Meaning of associated building work (1) For section 10(b), associated building work is the following building work that is not primary building work, but is other building work carried out under a contract that includes primary building work (the other building work ) (a) (b) if the primary building work under the contract is for a residence, other building work for anything on the site of the residence, but only if the other building work is for residential purposes; if the primary building work is for a related roofed building, other building work on the site of the residence or proposed residence for which the related roofed building is to be used, but only if the other building work is for residential purposes. (2) Despite section 5, work mentioned in schedule 1AA, sections 2, 20, 21,26, 29, 30, 32, 36 or 40 is building work that is associated building work if it is other building work. Schedule 1A(4) of the QBCC Act removes the requirement for Owner builders to hold a contractor s licence. Owner builders are required under Section 44 of the QBCC Act to apply for a permit to perform owner builder work, which is defined as building work for a building that is to be used for residential purposes carried out on the owner s land. The following work is excluded from the definition of owner building work: a) Building work for a multiple dwelling b) Fire protection work c) Work requiring an occupational licence. Further, if the value of the work is less than $11,000.00, it is exempt from the requirement to obtain a permit. Updated December 2013 version 5 4

ROLE OF ASSESSMENT MANAGERS AND COMPLIANCE ASSESSORS UNDER THE QBCC ACT Section 68(2) of the QBCC Act states: (2) an assessment manager or compliance assessor must not, under the Sustainable Planning Act 2009, issue a development approval or compliance permit for building work in respect of residential construction work unless (a) (b) the assessment manager or compliance assessor has written information from the Queensland Building and Construction Commission (QBCC) showing that the appropriate insurance premium has been paid; or the applicant produces satisfactory evidence that no insurance premium is payable. In relation to (a), the written information from the QBCC will be in the form of: 1) Confirmation of Insurance letter, or 2) Certificate of Insurance In relation to (b), this would normally be in the form of an owner builder permit unless the work is excluded from the definition of building work. Description of Residential Construction Work All licensees must effect QBCC insurance if performing any of the following work of a value of more than $3,300.00. DESCRIPTION OF INSURABLE RESIDENTIAL CONSTRUCTION WORK Insurable Buildings Replacements and Extensions to Insurable Buildings Houses Duplexes Townhouses Villa Units Units up to 3 storeys including residential /commercial mixed construction Related roofed buildings e.g. Carports, Garages, Gazebos, Pool houses, Sheds. Work that affects structural performance of an insured building Relocation of: Roofs Walls Internal Partitions Floors Foundations Replacement or re-fitting of a bathroom or kitchen * Notes: Units are only insurable if the building does not exceed 3 storeys in height above a car park. Only the residential component of a mixed residential/commercial construction is insurable. Contractors are not required to pay insurance if working as a sub-contractor or for an owner builder. Updated December 2013 version 5 5

The QBCC Regulation provides the following exclusions from Insurable Work Section 13 of the QBCC Regulation states Building work that is not classified as residential construction work 1) Each of the following is not classified as residential construction work a) building work on, or on the site of, a building or proposed building that is or forms part of any of the following i) a multiple dwelling of more than 3 storeys; ii) a backpacker s accommodation, boarding house, caravan park, guest house, holiday accommodation, hostel, hotel, lodging house or motel; (iii) a correctional centre, lockup, prison, reformatory or watch-house; (iv) a hospital, nursing home or other health care building; (v) an orphanage or children s home; (vi) a retirement village under the Retirement Villages Act 1999; (vii) an educational institution; (viii) group accommodation for persons with a physical or mental disability; (ix) commercial or industrial premises, if the building or proposed building A. also serves the commercial or industrial purpose carried on at the commercial or industrial premises; and B. is the only residential unit in the premises; Example of subparagraph (ix)(b) A caretaker s flat on industrial premises constructed for a caretaker responsible for the care or security of the premises or goods on the industrial premises. b) building work carried out by a building contractor for a person who is the holder of an owner builder permit covering the work c) loading, unloading or transporting a building that, if it were fixed to land, could be a residence, or a related roofed building, regardless of whether the transport is within the boundaries of land where the building is located or otherwise; d) off-site prefabrication of the whole of a building that could be a residence, or a related roofed building, whether or not the building is in its final form or in parts; e) loading, unloading or transporting a completed prefabricated building that could be a residence or a related roofed building, whether the building is transported whole or in parts, regardless of whether the transport is within the boundaries of land where the building is prefabricated, or to be located, or otherwise. Example of a building transported in parts A building is too large to be transported as a completed unit, and is transported on 3 trucks, then joined together on the land where it is to be used. 2) (2) In this section completed prefabricated building includes a prefabricated building a) that has not been placed on land where it is to be used; or b) to which services have not been connected, including, for example, electricity or plumbing and drainage. Updated December 2013 version 5 6

How is QBCC Insurance Paid? Payment of insurance by contractors is as easy as a phone call. Contractors simply call QBCC PhonePay on 1300 272 272 and use their licence number and PIN to access an operator. A PIN must be obtained in the first instance by phoning 1300 272 272. No paperwork is involved and payment is either by direct debit or credit card. Confirmation of Insurance can be mailed or faxed to the building certifier or contractor. If a contractor does not want to use PhonePay, they can complete an Insurance Notification Form and personally lodge it at a QBCC office or to QBCC via the mail. Allow a delay of at least 48 hours with personal and mail lodgements. QBCC no longer conducts an agency through local governments. No building certifiers are authorised to collect Insurance monies on QBCC s behalf. Any PhonePay enquiries, including PIN requests, should be directed to 1300 272 272. Updated December 2013 version 5 7

IS QBCC INSURANCE REQUIRED? Is the proposed work for construction, alteration, addition or repair to: Houses Duplex/s Townhouses Villa Units Units up to 3 storeys including residential / commercial mixed construction Related roofed buildings e.g. Carports, Garages, Gazebos, Pool houses, Sheds Yes No No further action required. NOTE: The following work is not insurable- Boarding-house, Guest house, Hostel, Caravan park, Lodging house, Backpackers accommodation, Hotel or Motel A retirement village governed by The Retirement Villages Act 1988 A residential unit forming part of commercial or industrial premises where it is the only unit in the complex and serves that complex Residential premises which are part of a health-care building or educational institution Children s home, orphanage, hospital, nursing home, prison, reformatory or correctional centre Off-site prefabrication of whole buildings Farm Building Building with residential component over 3 storeys Is the work (labour and materials) of a value of more than $3,300.00? No No further QBCC requirement Yes Is the work to be performed by an Owner builder? No Certifier to sight QBCC Confirmation of Insurance before granting development approval. Yes Certifier to sight Owner builder permit if value of work $11,000.00 or over. (see Owner builder Requirements) Record permit number. No further QBCC requirement.

OWNER BUILDER REQUIREMENTS Permit Issue: Permit Requirement: Work Value: The QBCC may, upon application by the owner/s of the land, and payment of the prescribed fee issue a permit allowing the owner to carry out Owner Builder Work on that land. A permit is required for work valued over $11,000.00. The applicant must complete an owner builder course approved by the QBCC. If the applicant is a company the course must be completed by one of the directors named on the permit application. These courses are provided by most TAFE institutions and several private providers. Contact QBCC for further information. When calculating the value of building work, the owner builder applicant must include the cost of materials and the cost of labour as if a licensed contractor performed the work. Applying for a second permit within six years: Section 44B(1)(c)&(d) of the QBCC Act provides clarification in general a permit cannot be issued if a permit has been issued to the same applicant within a previous six year period unless there are exceptional circumstances. Definition of Domestic Building Work: Domestic Building Work is defined by the Domestic Building Contracts Act 2000 as construction of a detached dwelling, renovations to a home, or removal of a detached dwelling. Exclusions: (a) An owner builder cannot carry out work that is related to a multiple dwelling or any work for commercial purposes. (b) Owner Builders cannot carry out work which requires an occupational licence such as plumbing, draining and gas fitting etc. unless the work is carried out by a person who holds the appropriate occupational licence. (c) Work which requires a fire protection licence, where the value exceeds $1100, can only be carried out by a person who holds the applicable licence. (d) There is no requirement to hold an owner builder permit where the total value of the Owner Builder Work is $11,000.00 or less and the work is performed personally by the owner of the land. Ownership: Where work valued over $11,000 is to be carried out on land where the land is owned jointly or in common by two or more persons, the application must be made jointly by all those persons. The applicant must have completed the specified course of instruction and, where there are two or more applicants, at least one of those persons must complete the course. Where the land is owned by a company, the application must be made jointly by the company and all its directors. Updated December 2013 version 5

Land Title: The owner builder work is noted on the land title for at least 7 years. Sales: Where the owner builder wishes to sell the property within 6 years from the date of the completion of the work, the vendor must give prospective purchasers a written notice containing details of the work and provide a warning that the work is not covered by insurance under the QBCC Act. Note the following: QBCC can refuse an application for a permit if the applicant has previously carried out grossly defective work building work (Tier 1 Defective Work) work which has caused or was likely to cause death or grievous bodily harm. QBCC can cancel or suspend an owner builder permit if the permit was obtained by fraud, Tier 1 Defective Work is carried out under the permit or QBCC becomes aware of facts that would allow QBCC to refuse to issue a permit if it were now being applied for. QBCC can impose conditions on a permit. An owner builder permit will end 6 years after its issue, or on an earlier date stated on the permit. A public register of persons holding an owner builder permit is kept by QBCC. FOR MORE INFORMATION REFER TO THE NEAREST QBCC OFFICE Updated December 2013 version 5

OVERVIEW OF THE QUEENSLAND HOME WARRANTY SCHEME What is the Queensland Home Warranty Scheme? The Queensland Home Warranty Scheme (the Scheme) is a Statutory Insurance Scheme established by the Queensland Government to provide protection to consumers for insurable residential construction work of a value of more than $3,300.00. What does it cover? It provides protection against: non-completion of the work covered by the contract defective construction subsidence or settlement of the building vandalism and forcible removal fire, storm and tempest. How does it work? The cover provided by the Insurance Scheme assists consumers when: a) During the course of the contract The contractor becomes bankrupt or goes into liquidation The contractor fails to complete the contracted works for reasons that are not the consumer s fault The insured suffers loss through vandalism or forcible removal The insured suffers loss through damage by a fire, storm or tempest. b) After completion of the work The contractor fails to fix defects that have been the subject of a QBCC direction, or, for various reasons (e.g. bankruptcy or liquidation, left the country, or deceased), can t attend to rectification. The building suffers from the effects of subsidence or settlement. Amount of Cover The Scheme provides for a maximum amount of payment for loss as follows: Pre-completion: $200,000 for: Non-completion Vandalism and forcible removal Defects that become apparent prior to completion Subsidence that becomes apparent prior to completion. Pre-completion: $200,000 for fire, storm and tempest Post-completion: $200,000 for: Defects that become apparent after completion Subsidence that becomes apparent after completion.

Period of Cover Non-completion Cover is provided for 2 years (from the date of payment of the insurance premium or the date of entering into the contract whichever is the earlier). Defective Construction Cover is provided for 6½ years, (subject to certain policy conditions) Settlement & Subsidence Cover is provided for 6½ years, (subject to certain policy conditions) Updated December 2013 version 5

Additional Benefits If a claim is approved, the policy also provides for the following losses: Reasonable cost of alternative accommodation Any furniture removal and storage costs necessarily incurred. N.B. Conditions and monetary limits apply. When does Cover Commence? Cover commences from the date of payment of the insurance premium, or the date of entering into the contract (whichever is the earlier). How can premiums be paid? Contractors can effect insurance by telephoning QBCC Insurance PhonePay on 1300 272 272 or by calling at any QBCC office. If contractors are unsure of how to use PhonePay the enquiry number is 1300 272 272. Who pays the Premium? The Scheme is financed by payment of a single premium which must be paid by the contractor. The development manager must sight a QBCC Confirmation of Insurance letter before development approval is granted. What is the cost of the Insurance? The premium is calculated on the contract value. The premium table can be viewed at www.bsa.qld.gov.au. Updated December 2013 version 5